In line with higher level of awareness about rights and obligations and the increased tendency to resort to litigation in society, demand for liability insurance is expected to expand in Turkey, said Milli Re in its 2019 annual report.
General liability is one line that has been able to grow in real terms, with a 23% increase in premium income in 2019 compared to 2018. Accordingly, the share of general liability in non-life premiums has reached 3%, and it is considered among the lines with the greatest growth potential.
With a total of 13 sub-branches, 90% of the total premiums in general liability emanate from general TPL, employers’ liability and professional indemnity. While the growth in TPL and employers’ liability remained limited due to competitive pressures, there was 37% real increase in premiums from professional liability insurance in 2019.
At the same time, it is expected that growth in health insurance business will continue, said the reinsurer, noting that premiums in this line of business grew by more than 34%.
Meanwhile, it is expected that the positive trend in financial lines such as surety and credit, which grew by more than 40% in 2019, will continue to develop in line with the economic conjuncture and state support, although their contribution to the insurance market is currently very small.
Cyber insurance too will be at the top of the insurance industry agenda, because of product diversity related with this class of business and the expected increase in demand for these products.
As for takaful, positive developments in recent years have been enhanced by the regulation enabling the necessary legal and operational framework for this segment, as well as by the emphasis given by the state to alternative financial markets. The total contributions produced in this segment reached 5% of the industry premium income at the end of 2019.
Milli Re also pointed out that one of the most important developments in the Turkish insurance market last year was the establishment of the Insurance and Private Pension Regulation and Supervision Authority (SDDK). With this structure, it is envisaged that managing the insurance industry through an exclusive entity will enable the maintenance of an optimum coordination between regulatory and supervisory functions and addressing the problems of the industry in a more rapid, efficient and effective manner.
Milli Re’s net profit amounted to TRY313m ($45.7m) last year, 12.3% higher than in 2018, while premium income reached TRY1,659m, up 25.7% over 2018. Paid claims increased by 28.8% to TRY987m in 2019. M
TRY1 = $0.15